Watchdog puts muzzle on critical statements issued by the banks
THE Financial Regulator has moved to block insurers and banks from making any un-approved public references to their watchdog.
The development is revealed in a June 12 letter from the Regulator's office, seen by the Irish Independent.
In it, institutions are told that if they make "public press statements" with "any references to the Financial Regulator", these should be "advised to the Financial Regulator prior to being released". A spokeswoman for the Regulator's office confirmed the letter had been sent to "all insurance companies and credit institutions".
"As a press statement can be written or oral the requirement to inform the Financial Regulator applies in either case," she added.
She insisted, however, that giving the Regulator advance notice on public statements was "not a regulatory requirement", but something that should be done "as a matter of courtesy".
This was so that "any questions or queries arising from the issue may be addressed".
The development makes it virtually impossible for insurers or banks to make any critical statements about their watchdog, and industry sources last night expressed surprise at the explicit instruction.
The main precedent for clearing public statements ahead of publication is in the area of takeovers, and it is not unusual for takeover panels to ask to vet statements to make sure detailed rules are complied with.
The Financial Regulator's office has come under intense scrutiny following the debacles at Anglo Irish Bank and Irish Life & Permanent, and the risky property lending that will drive untold billions of bad loans into the National Asset Management Agency.
The Financial Regulator chief executive who presided over the collapse of Ireland's financial system, Patrick Neary, has since resigned with a much-criticised €630,000 golden handshake.
His role was taken over by acting boss Mary O'Dea, but the Government has recently outlined plans to do away with the Financial Regulator's office entirely, marking the end of the office's six-year lifespan. Under the plan, the Regulator's supervision functions will revert back to the Central Bank, while its consumer-advice role will be given to the National Consumer Agency, which will soon become part of the Competition Authority.
The new structures are designed to be more accountable to the Oireachtas and provide enhanced evaluation and quality assurance to the financial industry.
The Financial Services Ombudsman, who adjudicates on individual customer complaints, will remain as a separate function.